Apartment rents rose last year on demand from millennials from here who stayed here and others who came to Oklahoma to work, especially young professionals.
So said multifamily specialists in their 2011 year-end market summaries and 2012 forecasts. Millennials, also known as echo boomers, are people age 25-34, children of baby boomers born in the 1980s and early '90s. The demographic is booming.
Rent growth rate averages of 5.6 percent for one-bedroom apartments, 4.1 percent for two bedrooms and 4.3 percent for three bedrooms were “easily the most significant over the past two decades,” according to William T. Forrest and Eva M. Wills of CB Richard Ellis-Oklahoma.
Forrest and Wills estimated another 3 percent increase in rent on average across all size units this year as occupancy remains high. The average occupancy rate was an estimated 92 to 93 percent at year end, according to several market surveys.
In Oklahoma, millennials as a segment of the population grew 12.2 percent from 2000 to 2010, putting the state fifth in the nation for increases, said Mike Buhl of Commercial Realty Resources Co. in Norman. That statistic, from Advertising Age, is a predictor of economic growth, he said.
It also is a predictor of apartment construction. Buhl said he sees a direct correlation between where millennial populations here tend to grow and new projects along Memorial Road, downtown and not far from Chesapeake Energy Corp., a major millennial employer. This year will bring around 1,500 new apartment units to the Oklahoma City area, he said.
“Why is the millennial population growing? Oklahoma's job market suffered less than many other states during the economic downturn. The combination of career opportunities and affordable living is attractive. Young professionals are being drawn to Oklahoma and the ones who were born here are staying. And many of these millennials are choosing to be renters rather than homeowners,” Buhl wrote.
Renting is appealing
In the wake of the national housing bust and tightened mortgage standards, renting remains popular despite the rising cost. Oklahoma City's rent growth ranked 16th out of 82 markets tracked by Reis Inc. last year and seventh over the past three years, said broker Andy Burnett of Sperry Van Ness/William T. Strange & Associates.
Renting is attractive for several reasons, said David Dirkschneider, multifamily broker with Price Edwards & Co.